The Lake Resources N.L. (ASX: LKE) share price is racing higher once again on Wednesday.
The lithium explorer was the top-performing stock on the ASX 200 yesterday, with a 16.67% gain.
Today, the Lake Resources share price opened another 4.08% higher at 25.5 cents.
The stock is currently up 6.94% to 26.2 cents.
Let's see what may be driving today's rise.
What's the latest news from Lake Resources?
The only news from the company today is a minor adjustment to yesterday's Kachi Project update.
The lithium explorer reported successful extraction and injection testing at Kachi yesterday.
Today, the company added a table of individual categories in relation to the mineral resource estimate.
This same table was published in June.
In other news, my colleague James reported this morning that broker Bell Potter has retained its speculative buy rating on Lake Resources shares but has taken an axe to its 12-month price target.
Bell Potter has a new price target of just 36 cents, down a whopping 86% from $2.52 previously.
The broker has incorporated recent company updates into its modelling for the lithium stock.
Bell Potter said:
The DFS will now review an initial 25ktpa Lithium Carbonate project (previously 50ktpa) with first production from 2027 (previously 2024) and potential for a subsequent 25ktpa phase. Capex is estimated at US$1.1-1.5b for 25ktpa (March 2021 PFS US$544m) and opex US$4,700-7,100/t (PFS US$4,178/t). Under revised (higher) price assumptions, LKE's estimate of the project's annual average EBITDA is now estimated at US$365m (PFS US$275m).
Our heavily risked and diluted LKE valuation of $0.36/sh now factors in a smaller project only (25ktpa LC) and the project's new parameters and timeline. We have conservatively ascribed no value to possible production expansions or LKE's other earlier-stage assets.
Test results a 'significant milestone'
To recap yesterday's announcement, Lake Resources carried out extraction and injection tests to quantify the hydraulic properties of the reservoir, test the viability of injecting into the core resource area, and develop data to support hydrogeologic modelling for wellfield design and reserve estimation.
Lake Resources CEO David Dickson says the testing shows "highly favourable reservoir hydraulic properties and allows us to optimise the future wellfield".
Dickson said:
The tests represent a significant milestone for the Project, as they provide important data and higher confidence for our modelling, which is essential for the completion of our DFS for Phase 1.
The results are indicative of high-yield, production-scale, extraction wells in the core resource area.
Michael Gabora, Director of Geology and Hydrogeology for Lake Resources, said the testing indicated that earlier exploration sampling results "were conservative".
Gabora said:
The positive results of this testing now allow for design of scaled up production and injection wells for the next stage of testing and production wellfield design.
Lake Resources last updated its resource estimate for the Kachi lithium brine project on 15 June.
The company increased its estimate by 53%. It raised the Measured, Indicated and Inferred estimate from 5.29 million tonnes (Mt) to more than 8.1 Mt of lithium carbonate equivalent (LCE).
This compares to the maiden mineral resource estimate of 4.4 Mt announced in November.
